Sept. 30 The growing reality of a possible government shutdown is hitting stock markets, creating a guessing game for investors. Bobbi Rebell reports.
No deal- is no good for U.S. stocks. Markets under pressure after it became clear it was very unlikely a last minute budget deal would be reached ahead of the midnight deadline. The brunt of the pain came from energy and defense sectors- a government shutdown would probably cut the amount of new contracts. But many on Wall Street were still taking the shutdown, and the market losses, in stride, confident it would be resolved sooner rather than later. Lazard Capital Markets' Art Hogan sees opportunity: SOUNDBITE: ART HOGAN, CHIEF MARKETS ANALYST, LAZARD CAPITAL MARKETS (ENGLISH) SAYING: "This current debate has cost us about 2.6% on the S&P 500 over the last several trading days. That may double itself. We may be down 5% before this mess is over. That is the entry point. You want to stay on the sidelines, watch this and if the market presents a buying opportunity because of the dysfunction going on in Washington that is the time to take advantage of it because we will resolve these issues." Between 800,000 and a million government workers deemed non-essential would be forced to take unpaid time off if congress fails to approve a spending bill. Among the agencies that will remain open: the Securities and Exchange Commission, for a few weeks, because they have carryover funds available. But a prolonged shutdown could significantly hurt the U.S. economy- and consumer confidence. For the markets- the funding standoff is just part of the uncertain outlook. Next up: a bill to raise how much the government can borrow. SOUNDBITE: ART HOGAN, CHIEF MARKETS ANALYST, LAZARD CAPITAL MARKETS (ENGLISH) SAYING: "We need to raise the debt ceiling or else we are going to default on our debt payments. Without doing that, which is something that we do all the time you know, and in trying to tie this process together. Markets get very concerned, that the government can make a policy mistake, and actually put us in a bad place. " That deadline: October 17th.